MKH Annual Report 2018

109 MKH Berhad Annual Report 2018 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (d) Foreign currency (Cont’d) (ii) Operations denominated in functional currencies other than Ringgit Malaysia The results and financial position of foreign operations that have a functional currency di erent from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows: (i) assets and liabilities for each reporting date presented are translated at the closing rate prevailing at the reporting date; (ii) income and expenses are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and (iii) all resulting exchange di erences are taken to other comprehensive income. Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2006 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date. Goodwill and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 January 2006 are deemed to be assets and liabilities of the parent company and are recorded in RM at the rate prevailing at the date of acquisition. Upon disposal of a foreign subsidiary, the cumulative amount of translation di erences accumulated in equity at the date of disposal of the subsidiary is reclassified to the consolidated profit or loss. (e) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. (i) Development properties Revenue from development properties sold is recognised on the percentage of completion method when the outcome of the property development projects can be reliably estimated. The stage of completion is measured by the proportion that development costs incurred for work performed to-date bear to the estimated total development costs for units sold. Where foreseeable losses on development properties are anticipated, full allowance of those losses is made in the financial statements. Revenue from the sale of completed development properties and land held for development are measured at fair value of the consideration received or receivable net of trade discounts and rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of properties can be estimated reliably, and there is no continuing management involvement with the properties. (ii) Investment properties Revenue from sale of investment properties is measured at fair value of the consideration received or receivable. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of investment properties can be estimated reliably, and there is no continuing management involvement with the properties. NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2018